With just one car, he wants to be an "Apple"?

Carrying an ideal car of an Apple dream, it rushed into the forefront of the new car-making forces, ranking third at the end of 2021.

On February 26, Ideal preemptively released its 2021 financial report, and the annual delivery and revenue reached a new high. With the Ideal ONE, a range extender tram alone, the company sold more than 90,000 units and generated $27.01 billion in revenue.

This is a rare situation in the history of automobile development. In contrast, other families have at least three or four cars to achieve similar sales.

Ideal CEO Li Xiang said that the strategic characteristic of Ideal Car is focused, and it has completed the verification from 0 to 1.

But he couldn't breathe a sigh of relief. With the listing of Weilai Automobile in Hong Kong, the capital layout of the new domestic car-making forces has become perfect and has entered a white-hot competition, not to mention that there are many second-tier companies looking at the tiger.

And the ideal of only one car, holding a double-edged sword, success is also it, and defeat will also be it. If you can't break through yourself and expand the boundaries on the basis of this car, the ideal will not have a future.

Falling behind is frightening for anyone at the helm of a new energy vehicle company, and the surge in R&D spending shows Li's determination to meet the challenge, and his goal is to achieve more than 20% market share in the home user market.

Apple is Li's ultimate vision, but right now, he's still far away.

Single "cart" horse

Born in a motor home, Li Xiang has always advertised himself as a product manager. At the beginning of the business, it did not follow the trend, but chose to launch an eclectic range extended electric vehicle, which can alleviate the anxiety of battery life while also enjoying the benefits of some new energy policies.

The success of segmentation positioning is one of the key factors in the popularity of the ideal ONE. It is this "platform pillar" that supports the status of the top three new forces of ideal car manufacturing, and it is also the glory of continuing the "Carry full field" of bicycles in 2021.

The Ideal Q4 earnings report showcases multiple growth records for the quarter. With 35,221 units delivered in the quarter, it surpassed established traditional car companies such as Highlander and became the benchmark for 6-seater SUVs among 300,000 SUV units.

What is more striking is that the increase in revenue and profit increase in the quarter. Vehicle sales revenue for the quarter was 10.38 billion yuan, an increase of 155.7% year-on-year, and net profit recorded 295.5 million yuan, which was the second single-quarter profit since the ideal listing.

In the whole year of 2021, Ideal Auto delivered a total of 90,491 vehicles, with NIO sales reaching 91,429 units and Xiaopeng units reaching 98,155 units; however, NIO has 5 models on sale, of which the best-selling ES6 sold 41,474 units, Xiaopeng had 3 models on sale, and the best selling was P7,60569 units. The ideal is basically 1 car to single out 3 or 5 models of other cars.

At the same time, the ideal achieved revenue of 27.01 billion yuan, of which vehicle sales revenue was 26.13 billion yuan, accounting for 97% of the total revenue. The ideal ONE's status speaks for itself.

In terms of gross profit margin, the ideal belongs to the first echelon, second only to Tesla. In terms of Q3 quarterly reports, the gross profit margin of vehicles in the ideal quarter was 21.1%, Weilai was 18%, Xiaopeng was 13.6%, Tesla was 30.5%, and the gross profit of most other domestic independent brands did not even exceed 10%.

The success of this car has brought positive cash flow to the company. According to the financial report, as of December 31, 2021, the total cash of Ideal Auto reached 50.16 billion yuan. Operating cash flow for the fourth quarter of 2021 was $3.84 billion, an increase of 110.7% year-on-year, and free cash flow was $1.62 billion, an increase of 1.3% year-on-year.

However, the ideal is still a loss in 2021, with an annual net loss of 321.5 million yuan, a year-on-year surge of 111.9%. In addition to marketing expenses such as marketing that accompanied the rise in sales, the company said that another big reason for the loss was to increase investment in research and development.

According to the financial report, the ideal fourth quarter R & D expenses were 1.23 billion yuan, an increase of 38.4% month-on-month; the annual R & D expenses reached 3.29 billion, an increase of nearly 2 times over 2020, accounting for 12.18% of the annual revenue and 57.11% of the total gross profit.

Behind the cold numbers is the heart of the ideal team eager to break through.

Unlike Weilai's high-end positioning and Xiaopeng's emphasis on automatic driving, the ideal positioning is home users. Affordable and innovative, eat through the user's pain points at the same time, relying on the price of 300,000 yuan to pry open the "Daddy Car" market, supporting the ideal market value of 100 billion.

But Li wants to know that it is difficult to maintain a long-term increase in market share by relying on the ideal ONE. More than 10% of the revenue and nearly 60% of the gross profit are invested in research and development, which is what Li Xiang, who has always been meticulous, has taken precautions before the growth of the "pillar" reaches its peak, and even temporary losses are not a problem.

Between success and failure

There is currently only one car ideal, and the target is Apple.

Li xiang said in the Q4 earnings call that he hopes to be able to achieve the same level as Apple in ten years. This is the strategic focus and core of the ideal car.

But the ideal of the moment is still far from the goal. The new energy automobile industry that has become a red sea, the more eye-catching the sales of the ideal ONE, the more eye-catching, Li Xiang will be afraid of the disappearance of this advantage.

It's a double-edged sword. The ideal ONE achieves the ideal of the moment, but it is also its biggest risk point, which is equivalent to "putting eggs in one basket". Once the car is no longer popular, the ideal will sell nothing to sell.

The ideal anxiety comes from the fact that, on the one hand, the company's market value of 100 billion yuan is the ideal ONE carrying of the "pillar"; on the other hand, as a transitional product that also burns oil, how long can the extended range electric vehicle be sold? If you are distracted to do other models, will it weaken the presence of the ideal ONE?

And sales of this car are already declining. Deliveries in February fell from 122.68 million units in January to 8,414 units, breaking a record of three consecutive months of sales of more than 10,000 units. According to the ideal previous forecast, the delivery volume of 30,000 to 32,000 units in the first quarter means that the March delivery volume must be in the range of 9,000-11,000 units, and the pressure is not small.

After Cook succeeded him, Apple listened close to the needs of users, launched a variety of models of iPhones, and established and improved its own ecology, which is why Apple can become a trillion unicorn company.

Ideals also have to expand the boundaries. Li wants to say that in the next stage from 1 to 10, it will be a range extender + pure tram walking on two legs. The company plans to release its second model, the X01, in 2022Q2, with next-generation range extender technology. At the same time, Ideal is also studying high-voltage pure electric vehicle technology, cutting into the field of pure electricity as soon as possible, and will launch two other SUVs in 2023.

In addition, in terms of insufficient automatic driving, ideals have also begun to increase investment. From 2022 onwards, the company plans to equip all new models with the necessary hardware for self-developed L4 autonomous driving compatibility.

At present, in the home user market of more than 200,000, the ideal only accounts for 2.5% of the market share. Li wants to believe that when this number reaches 20%, the growth from 1 to 10 is completed.

The large investment in research and development and supply chain makes Li want to have great expectations for 2022. He set a sales target of 200,000 units this year, which is more than double the growth from last year. Whether the ideal ONE can continue to be brilliant and whether x10 can successfully make up for it has become the key.

The company revealed that the Changzhou base and the Beijing base are expanding and constructing respectively, and are expected to reach a production capacity of 750,000 units in 2023 with a double-shift working mechanism. In addition, it plans to open 400 retail centers by the end of 2022.

However, at the critical moment of ideally moving to the next step, wang Kai, the company's CTO, proposed to resign. Having worked for a tier 1 supplier for many years, he is the ideal responsible and intelligent soul figure.

Li Xiang himself once admitted that the most difficult problem in building a car is not money, but "people". And Wang Kai's departure is undoubtedly a blow to the echelonization of ideal talents.

In the past few years, the ideal has achieved amazing results by focusing on doing a good job of a car ideal ONE, which is not easy. But it is clear that it is still shallow.

2022 will be a challenging year. Capital and resources are still pouring into the new energy industry, and more heavyweight players are emerging, such as Huawei, Baidu, Xiaomi, Apple and other Internet industry capital, as well as traditional car companies such as Volkswagen and Ford are also deeply laying out electric vehicles.

The strategy of competitors is to deploy multiple points and attack the whole line, in various market segments, such as THE ET5 that Weilai has launched a sinking market, the ES7 that benchmarks bmw X5L, and the volkswagen spin-off Porsche listing. The ideal of only one car must also be considered more.

Whether the new model can be launched smoothly, and whether the production capacity and sales volume can quickly climb, determines whether the ideal can gain a firm foothold in the new forces of car manufacturing. At this moment when the industry pattern is undecided, no one has occupied an absolute advantage, Weilai and Xiaopeng are so, and the ideal is no exception.

Before the company's IPO, Li Xiang had said: "I have operated a $10 billion company, and I hope to operate another 100 billion dollar company." His goal is to achieve 1.6 million annual sales and more than 20% market share by 2025.

The ideal and Li thought, just began.